Derivatives

BANKS ARE dabbling more and more in derivatives, but many aren't closely monitoring the risky investments, according to a just-released national survey of top bank executives. The survey found that 58 percent of banks and thrifts use derivatives in their own securities portfolios, but 47 percent of the institutions that use derivatives don't provide their boards of directors with monthly information on their institutions' derivative exposure.

When the Orlando Solar Bears opened training camp in September, coach Drake Berehowsky handed a copy of the team handbook to each player. On the bottom of the packet of contact information and general expectations, a quote from legendary Alabama football coach Bear Bryant read: "No coach has ever won a game by what he knows; it's what his players know that counts. " In his first season as a pro hockey head coach, Berehowsky has drawn upon the philosophies of notable leaders in sports and military history, including Bryant, through books.

WE READ Dick Marlowe's July 6 Business column (''Players who wade into deep waters of derivatives need new rule book'') with great interest. Mr. Marlowe makes two extremely important and insightful observations about this largely misunderstood market: (1) the business is not as sophisticated and complex as it sounds; and (2) people who use financial instruments to make speculative plays may well wind up reading about themselves in the headlines!''Derivatives'' is a broad term that covers a large number of financial products.

By Mary McNamara, Los Angeles Times Television Critic, September 24, 2012

"Partners," which premieres Monday on CBS , is impossible to review without comparing it to other shows. It's "Will & Grace," except the best friends are men. It's "The Odd Couple," except this Felix is gay. In fact, another show, by the same name and sharing, at least for the pilot, director James Burrows and the same time slot, aired in 1995. Yet despite, or perhaps because of, its derivative nature "Partners" is, if not revolutionary, then a monument to the fight: It proves, more than "The New Normal" or even "Modern Family," that being a gay man on TV is no longer a big deal.

The size of the derivatives market increased to $15.6 trillion last year, but a series of losses by investors slowed its furious growth, according to a regulator of national banks.The face amount of contracts in the derivatives market increased from $11.9 trillion at the end of 1993. But most of last year's growth came in the first six months, when the market rose to $15.3 trillion, according to the Office of the Comptroller of the Currency.The market didn't grow at all in the fourth quarter of last year, the OCC said in a new report on the derivatives market that it plans to update and release each quarter.

The derivatives craze is hitting too close to home. When the investments of state Treasury funds take a sudden $175 million plunge, somebody should be concerned - particularly when the loss comes from trading in the relatively new and little-understood game of high-stakes derivatives.It was reported last week that investments managed by state Treasurer Tom Gallagher tumbled $175 million for the year - after once being ahead by $400 million.To a lot of people who have been there, that sounds more like gambling than investing.

The politics of financial regulatory reform are simple. After the meltdown and the bailout, many Americans -- perhaps most Americans -- are inclined to see Wall Street as predatory and all-devouring. Striding into the lion's den and calling the beast to heel, as President Obama did Thursday, was a move without a downside. Perhaps Obama could have scored more popularity points if he had ordered a few financiers to be led out of the Cooper Union auditorium in handcuffs. Then again, in terms of candidates for a perp walk, there were pretty slim pickings: Many of Wall Street's leading luminaries stayed away, perhaps out of pique at the notion that mere elected officials would have the gall to tell Masters of the Universe how to run their affairs.

WASHINGTON, D.C. The Obama administration is asking Congress to extend its oversight of the financial system to include the shadowy market of derivatives, the kind of complex financial instruments that helped bring down insurer AIG. In a draft two-page letter to congressional leaders, the Treasury Department said it wants to create a central electronic-based system that would track the buying and selling of derivatives. It also wants to ensure that financial firms selling the instruments have enough capital on hand in case they default and to subject them to stringent standards of conduct and new reporting requirements.

In a crisis as big as the one that has shaken the U.S. economy, finger pointing is inevitable, especially among presidential candidates in the home stretch of a campaign. Democrat Barack Obama has put much of the blame on Republicans, including John McCain, for deregulating the financial system. Mr. McCain has faulted Democrats, including Mr. Obama, for encouraging mortgage giants Fannie Mae and Freddie Mac to guarantee risky home loans. They're both at least partly right. This is a bipartisan bungle.

A perfect storm has recently ravaged the United States. No, I'm not talking about Hurricane Ike, which devastated the Gulf coast much like Hurricane Katrina had done three years earlier, but the economic crisis that is unfolding along Wall Street. Recently, we've witnessed the fall of Bear Stearns, Freddie Mac, Fannie Mae, IndyMac Bancorp and a host of other banks and investment companies, but many of us do not understand why. The answer is easy: the use of financial derivatives called collateralized debt obligations and credit default swaps.

For a painfully provocative start, The CW's Hidden Palms serves a shocker. In the first scene, a teen boy sees his father commit suicide. A year later, Johnny Miller (Taylor Handley) struggles with sobriety, family tensions and an unsettling move to Palm Springs, Calif. Johnny is shaken to learn that his new bedroom was the scene of a teen boy's apparent suicide. "There's something off around here," Johnny says of Palm Springs. "This place has a severe tonal problem." He also could be describing Hidden Palms, which debuts at 8 p.m. Wednesday.

Obviously, the Johnny Cash album of the year will be American V: A Hundred Highways, his final Rick Rubin collaboration, due on July 4. Personal File, a two-disc collection of acoustic songs from the Cash vaults in stores today, is a nice way to set the mood for that big release. These songs, a whopping 49 in all, were culled from boxes of personal tapes that Cash recorded at home alone with his guitar from 1973 into the early 1980s. It's an eerie and wonderful foreshadowing of the solitary style in which Rubin would showcase Cash's talent in the 1990s.

BRASILIA, Brazil -- Federal police were looking for three businessmen Friday accused of partaking in a scheme to defraud the health ministry of hundreds of millions of dollars. Federal police said they were searching for Lourenco Rommel Peixoto and two other unidentified executives accused of coordinating a scheme that allegedly defrauded the government of $625 million in the past 13 years. The suspects are accused of buying blood derivatives at one price and then charging a higher price to sell them to governments and pocketing the difference.